The government has blocked an attempt by Barnato Exploration (Barnex) to sell its Prestea mining lease.

A local business daily said officials at the mining and energy ministry confirmed that the government was inclined to support retrenched workers' efforts to continue underground mining operations while negotiations for the amicable withdrawal of the Barnex licence continue.

According to the paper, Barnex had signed a letter of intent dated August 3, to sell its 90% stake in Prestea Mines to Golden Star Resources, a Canadian company.

Barnex won the rights to take over the stateowned Prestea Mines in the mid-1990s, but because of depressed gold prices decided in 1998 to close the underground mine, lay off most of its workers and focus on surface mining.

There followed a protracted crisis until the workers pooled their layoff benefits and took over the underground mine.

The newspaper said government officials feared the situation would be further complicated by the sale of the mine to Golden Star, which acquired 70% of neighbouring Bogoso Gold Mines last year. BridgeNews.